Plugging loophole in personal income tax relief long overdue

LET us call a spade a spade. With higher incomes among the wealthy, the six-figure tax reliefs claimable by high-income mothers from the Working Mother's Child Relief (WMCR) has become a significant tax loophole that needed to be fixed in the 2016 Budget.

In the debate about whether the new S$80,000 personal relief income cap is fair for high-income working mothers, the focus should not be on the women alone, who deserve plaudits for their achievements. Rather, society should examine the family unit behind the high-income mother. Successful, well-educated, high-income women are more likely to meet and fall in love with well-educated, high-income men. This pattern of assortative mating - people marrying others like themselves - is getting more pronounced over time.

High-income families, with their six-figure tax reliefs, get to enjoy tens of thousands of dollars of extra tax savings compared to ordinary families every year. These monies were, in all likelihood, funnelled into enrichment activities for their already-privileged children: tuition to enter the Gifted Education Programme, extra sports and arts lessons to qualify them for Direct School Admission exercises into the Integrated Programmes at elite junior colleges. The savings would have been used to send children to overseas universities if they could not get into local ones.